According to CRA technical interpretation 2015-0565741E5, subsection 256(6) will not save the CCPC status of a corporation whose shares are pledged to secure an indemnity. The CRA concluded that an indemnity is not a debt for the purposes of the subsection.
The technical interpretation addressed a situation where the corporation’s shares were held by an estate of which a public corporation that was a trust company was the estate trustee. The trust company distributed the corporation’s shares to the estate’s beneficiaries. The beneficiaries agreed to indemnify the trust company for a period of years, which indemnity was secured by a pledge of the distributed shares.
